E-ZPass subsidy lingered too long
As of last week, it costs $1.50 a month to maintain an EZ-Pass account with the state of Maryland. That's a scandal.
Not the fee. That's chump change. What's appalling is that it took the Maryland Transportation Authority so long to impose it. Not until there was a severe revenue shortfall did the authority's board muster the political courage to partially plug a leak that's been costing the state millions of dollars a year. The money could have gone toward repaving a section of the Kennedy Highway or enforcing traffic laws at the Fort McHenry Tunnel or planning the replacement of antiquated bridges.
It's money that's been squandered.
That's my conclusion after learning last week from Randy Brown, the authority's operations director, that about 72,000 of the state's roughly 535,000 E-ZPass account holders hadn't used their transponders to pay a toll in the past year. He put the annual cost of maintaining those dormant accounts at $1.9 million a year. That doesn't include the $21 cost of the units that were given free to people who don't use them.
I don't think there are a lot of people out there who share my outrage at that. Most of the reaction I've heard is from people who object to the state's attempt to recover its costs. Quite a few boasted that they've closed their Maryland E-Zpass accounts and opened them in states that charge little or nothing.
Not the fee. That's chump change. What's appalling is that it took the Maryland Transportation Authority so long to impose it. Not until there was a severe revenue shortfall did the authority's board muster the political courage to partially plug a leak that's been costing the state millions of dollars a year. The money could have gone toward repaving a section of the Kennedy Highway or enforcing traffic laws at the Fort McHenry Tunnel or planning the replacement of antiquated bridges.
It's money that's been squandered.
That's my conclusion after learning last week from Randy Brown, the authority's operations director, that about 72,000 of the state's roughly 535,000 E-ZPass account holders hadn't used their transponders to pay a toll in the past year. He put the annual cost of maintaining those dormant accounts at $1.9 million a year. That doesn't include the $21 cost of the units that were given free to people who don't use them.
I don't think there are a lot of people out there who share my outrage at that. Most of the reaction I've heard is from people who object to the state's attempt to recover its costs. Quite a few boasted that they've closed their Maryland E-Zpass accounts and opened them in states that charge little or nothing.
Many of these folks seemed to think that their collective action could bring the state of Maryland to its knees and paralyze the flow of traffic though its toll plazas. Think again. According to Brown, the state has about 8,000 more E-ZPass subscribers in July than it did in January, before the fee was first proposed.
For those who moved their accounts to another state, the satisfaction will likely be short-lived. Every toll authority in the country is experiencing the same revenue pressure as Maryland. They're all looking for ways to raise money. The obvious first step is to cut waste. And nothing's more wasteful than subsidizing E-ZPass accounts that aren't being used.
These authorities all watch one another, and folks in New Jersey and Virginia and at the Peace Bridge Authority ( New York-Ontario) will see that Maryland imposed a fee and the sky didn't fall. They'll follow suit - especially when they realize they're carrying a bunch of Maryland subscribers who rarely pay tolls to them but whose accounts are a drain on finances.
You can't really blame folks who feel betrayed by the imposition of the fee. For a long time, the state was peddling the Myth of the Free Lunch. Here, Dave, have a free transponder. No, Sally, there's no charge for the service. You're doing the planet a service, Jamal. You'll never sit in a tollbooth line again, Maria.
I don't get a free pass here. I didn't blow the whistle on the proliferation of transponders that were going unused. When the former governor and former comptroller were holding cheery press conferences, exhorting everybody to sign up for E-ZPass so we could all reach the beach faster, I didn't ask them the right questions. It wasn't until the authority blew the whistle on itself that I realized I'd missed a darn good story.
(Hint to fellow reporters in other E-ZPass states: Ask your local toll authorities how many of their E-ZPass subscribers have gone a year without using their transponders to pay a toll. Ask how much money they've been wasting as a result. Ask how many Marylanders have signed up in their state over the past six months. It'll be the easiest front page story you ever had.)
There was a sound reason for making E-ZPass available free in the beginning. It is a more efficient way of moving traffic, and it should save costs in the long run, despite heavy, upfront capital costs. And it probably did require a sweetener to get the system to the point where it could stand on its own.
But E-ZPass is been well-established here and through most of the East Coast. The free-lunch offer long outlived its rationale. But because people had been fed a line to get them to adopt the technology, they saw the reduction of a subsidy as an onerous new tax.
As a government entity, the authority feels its has to sugarcoat everything it says. I don't.
If you're not using your E-ZPass enough to justify the cost, ditch the transponder. It's not a tax. You don't have to keep paying $1.50 a month. You won't miss it much and you won't be missed as a customer. Traffic will flow just fine. You'll get part of your windshield back.
And the next time someone offers you something for "free," keep walking.
For those who moved their accounts to another state, the satisfaction will likely be short-lived. Every toll authority in the country is experiencing the same revenue pressure as Maryland. They're all looking for ways to raise money. The obvious first step is to cut waste. And nothing's more wasteful than subsidizing E-ZPass accounts that aren't being used.
These authorities all watch one another, and folks in New Jersey and Virginia and at the Peace Bridge Authority ( New York-Ontario) will see that Maryland imposed a fee and the sky didn't fall. They'll follow suit - especially when they realize they're carrying a bunch of Maryland subscribers who rarely pay tolls to them but whose accounts are a drain on finances.
You can't really blame folks who feel betrayed by the imposition of the fee. For a long time, the state was peddling the Myth of the Free Lunch. Here, Dave, have a free transponder. No, Sally, there's no charge for the service. You're doing the planet a service, Jamal. You'll never sit in a tollbooth line again, Maria.
I don't get a free pass here. I didn't blow the whistle on the proliferation of transponders that were going unused. When the former governor and former comptroller were holding cheery press conferences, exhorting everybody to sign up for E-ZPass so we could all reach the beach faster, I didn't ask them the right questions. It wasn't until the authority blew the whistle on itself that I realized I'd missed a darn good story.
(Hint to fellow reporters in other E-ZPass states: Ask your local toll authorities how many of their E-ZPass subscribers have gone a year without using their transponders to pay a toll. Ask how much money they've been wasting as a result. Ask how many Marylanders have signed up in their state over the past six months. It'll be the easiest front page story you ever had.)
There was a sound reason for making E-ZPass available free in the beginning. It is a more efficient way of moving traffic, and it should save costs in the long run, despite heavy, upfront capital costs. And it probably did require a sweetener to get the system to the point where it could stand on its own.
But E-ZPass is been well-established here and through most of the East Coast. The free-lunch offer long outlived its rationale. But because people had been fed a line to get them to adopt the technology, they saw the reduction of a subsidy as an onerous new tax.
As a government entity, the authority feels its has to sugarcoat everything it says. I don't.
If you're not using your E-ZPass enough to justify the cost, ditch the transponder. It's not a tax. You don't have to keep paying $1.50 a month. You won't miss it much and you won't be missed as a customer. Traffic will flow just fine. You'll get part of your windshield back.
And the next time someone offers you something for "free," keep walking.
Posted by Michael Dresser at 10:43 AM | Permalink
| Comments (16)
Categories: Maryland toll facilities
Categories: Maryland toll facilities
Comments
"That's chump change." That's the type of thinking that politicians use to justify their greedy hands constantly taking money out of wallets.
Yes, the amount is small, but when you add it vehicle registration fee increases, higher taxes, increased utility rates, etc. -- each one advertised as "modest" or "minimal", yet when added together, it's death by a million small wounds, inflicted by every greedy politcian and bureaucrat that refuses to abide by the same fiscal rules and responsibilities that apply to us common folk.
Posted by: Bill | July 6, 2009 12:04 PM
I read your blog on how it's about time the state deserves to get $1.50 per month for use of an EZ pass transponder and I am wondering what planet you live on? Arfe you saying, in this day of computers, that it is costing the state money for those who do not use a transponder? Is it cheaper to pay someone to stand there at the toll booth, breathing in car fumes and taking money from those who do not have a transponder? I won't even go into the sad look you get from the toll takers. If the transponder is not being used. why is there an additional cost. It is already in the system waiting for the time it goes thru the lane. I just got my Deleware transponder and am in the process of turning in the MD one. I use it about 10 times a year. IO am already paying inflated tolls, especially going up 95 where they get you twice between MD and DE. I am being taxed for the gas I use, as well as everything else. Paying $1.50 per month in addition just gets my goat. Think of how much more it would cost us overtaxed citizens to sit in long lines, putting more fossil fuel residue in our already cancer causing air if we didn't use the EZ Pass a few times a year. I guess when it comes to taxing, we just don't count.
Posted by: Irv Hamet | July 6, 2009 12:15 PM
Just like ATM's. They promote as "convenience" to the public (which they are) but real reason for introduction is cost saving from elimination of jobs. Then once they are entrenched, they say they have to charge fees to maintain. And I saw article in WSJ that says Colorado (and eventually all states) will wipe out all cash toll booths and charge premiums by mail to those not participating. What a joke - just another revenue source like the "speed cameras".
Posted by: Bob | July 6, 2009 12:38 PM
It seems perfectly reasonable to charge people who don't use their EZPass for the overhead imposed by the existence of their account - but why should the rest of us have to pay for them? By using my EZPass every time I drive across the Bay Bridge or through the tunnels, I'm giving the MTA my money at a reduced cost to them (no tollbooth attendant). Why not just institute an "account maintenance fee" for any month where a pass is not used, and not charge when it is used? Or if you want to be really generous, allow a 1-2 month grace period, then start charging? I understand that unused passes provide no revenue to the state, but if they're truly the cause of the program losing money, why not focus the penalty there?
Posted by: MarkT | July 6, 2009 12:44 PM
Since I use the E-Z Pass only a few times per year, why should I pay $1.50 per month account maintenance when that cost exceeds the toll costs I pay in the course of a year?
I won't and like many others will just cancel my accounts. As Bill above says, how much does it cost the state for me not to use the transponder? This will just add to the waiting lines at the tolls and increase the bills for others who use E-Z Pass. Once their bills increase, they'll stop using E-Z Pass also and then we'll be back where we were before E-Z Pass started. Is that what anyone wants? How does this help the State?
Posted by: GaryB | July 6, 2009 1:41 PM
The sensible thing to do in order to recover costs from improving efficiencies within the state's transportation system, is to charge those who choose not to use the EZ-Pass automation service.
Using an ez-pass decreases congestion, lowers costs for running the toll roads, through automation, lower personnel costs, it decreases pollution and carbon emissions, etc, etc, etc. I'd rather see the tolls increase for those who choose to still use a toll agent.
Shouldn't the state remove the barriers to entry into this market? Shouldn't the state promote efficiency in government and in our economy? Shouldn't the state help us implement and fund clean energy policy?
I use the tolls about once a month. so for that service, I now have to pay a 1/3rd extra. Huh? So, let me get this straight: I'm trying to be smarter about how I use energy when I travel...I have to pay more to do that?
I'll be sending mine back and sitting in line, burning more fuel, wasting time and clogging up the highway.
Posted by: mike farrell | July 6, 2009 1:52 PM
Mr. Dresser: I suppose you have no problem with banks, credit card companies, utility companies, and other service providers all charging monthly fees to recover the cost of "maintaining" people's accounts, right?
You are unbelievable. Your bias is so evident, I don't see how you could ever be perceived as a fair and balanced reporter.
Posted by: FH Resident | July 6, 2009 2:15 PM
Why not get the rest of the story? How much does it cost the toll authority to service a cash customer versus an EZ-Pass customer? Lets see that printed.
Posted by: SE Young | July 6, 2009 8:25 PM
How about some hard numbers from the MTA proving it really costs them $1.9 million a year to maintain 'inactive' accounts. And while you are at it how about also finding out how much EZpass has saved in employee salaries for the Authority....
Posted by: Paul | July 6, 2009 9:09 PM
Free transponder? Mine cost $25. It's true that the money went on account and could be used to pay tolls, but a "dormant" or occasionally used account was giving the state use of that money; and the account must always maintain a balance of at least $10. The cost of maintaining an electronic account can't be more than a few cents a year.
Coupled with the labor savings from fewer toll takers, and the environmental benefits from increased flow of traffic, the $1.50 disappearing from account each month seems like I'm being taxed for being a good citizen.
Posted by: O Brother | July 6, 2009 10:18 PM
Mr. Dresser: Your must be paid by MTA to write this article or you are out of the touch.
Posted by: Jimmy Chu | July 7, 2009 7:08 AM
I turned mine in and received a refund for the unused prepaid tolls, but the state kept my initial $25.00 calling it a "transponder fee." They also had the use of my prepaid toll money on deposit but as yet unused. I realize that interest rates are low and that the state did not make a fortune in interest on my money, but they sure made something and now the state of Pennsylvania has that opportunity since i got a new EZ Pass from there.
Posted by: Harvey Scherr | July 7, 2009 10:55 AM
$1.9 million for 72,000 inactive records in a database? Give me a break. If they spend $1.9 million on inactive accounts, I think they need to fix something else.
Posted by: Shane | July 7, 2009 11:12 AM
"It seems perfectly reasonable to charge people who don't use their EZPass for the overhead imposed by the existence of their account - but why should the rest of us have to pay for them? By using my EZPass every time I drive across the Bay Bridge or through the tunnels, I'm giving the MTA my money at a reduced cost to them (no tollbooth attendant). Why not just institute an "account maintenance fee" for any month where a pass is not used, and not charge when it is used? Or if you want to be really generous, allow a 1-2 month grace period, then start charging? I understand that unused passes provide no revenue to the state, but if they're truly the cause of the program losing money, why not focus the penalty there?"
Mike T - You said it all right there!!!
Posted by: DIfferent View | July 7, 2009 11:47 AM
I think all of us EZ-Pass users need to show the state exactly how much money, time and conjestion that we save the MdTA. We should organize a modern day sit in. We should pick a day and every disgruntled EZ-Pass user should STOP in the EZ-Pass lane for just 5 seconds, in protest. When the backups at the toll plazas extend for miles the MdTA will see exactly how much money we all have saved them in building bigger toll plazas which makes the so called ($1.9) million to maintain dormant accounts look like chicken feed.
Posted by: Scott | July 7, 2009 10:56 PM
I like a lot of other people use the EZPASS when I visit family in New England 3 or 4 times a year. Am I costing MD a ton of money? I don't think so. Assuming that the average account balance is $12 that means there is approximately $6 million dollars earning interest somewhere. If MD is only earning minimum interest they had better find someone to handle their money.
Posted by: A. Godinho | July 9, 2009 12:07 PM